Can commissioners turn their albatross into apartments for 20-somethings?

There’s only one feasible option for what to do with the abandon Haywood Department of Social Services building: turn it into apartments.

The rundown, four-story brick office building was originally built as a hospital in the 1940s. It most recently housed DSS offices, but has been empty for nearly two years.

The county would like to sell it, but so far interested buyers haven’t been forthcoming, most likely daunted by the massive renovations necessary to turn the old space into something marketable.

So Haywood County, the town of Waynesville and the Haywood Advancement Foundation together commissioned the University of North Carolina School of Government to evaluate and recommend redevelopment options for the aging building, which affects both the county and town.

“That building impacts us both greatly,” said Waynesville Alderman Wells Greeley.

Findings from the study were presented at a joint meeting of county and town leaders on Monday. The study evaluated turning the hospital into a small business incubator or hotel but neither was deemed a good use of the space — either because of lack of demand or financing options.

So instead, the consultants focused on housing. Similar old buildings in North Carolina, including a historic hospital in Gastonia and one in Lexington, have been transformed into some type of housing. The old hospitals historic status could play in Haywood County’s favor when marketing the structure to developers, or eventually to residents.

“The sales point would be the historic nature of it,” said Haywood Commissioner Kevin Ensley.

One of the leading options is affordable, low-income apartments, which could qualify for a generous tax credit as an incentive to developers. However, Haywood County officials have been down the affordable housing road before.

A company that specializes in low-income senior housing around the state offered to buy the old hospital for about $1.3 million. But the deal was contingent on getting sizeable state tax credits to offset the upfront cost of renovations. The plan fell through when the building didn’t qualify for the tax credits because it wasn’t within walking distance of a grocery story.

“The primary reason this project failed is because of a low site score,” said Jordan Jones, a community revitalization fellow at Development Finance Initiative at the UNC School of Government.

Since then, the criteria of how close a site must be to a grocery store has changed, and the building would now qualify for the credits after all. The county would just need to find a developer willing to take on the project once more.

However, the low-income tax credit is a competitive process, and the application deadline is only four months away. Still, the analysis concluded that a 54 unit affordable housing project was a top contender.

“We recommend that the county go ahead and move forward quickly on this,” Jones said referring to the tax credit application process.

Waiting for the low-income tax credit approval could take 14 to 18 months.

Instead of low-income apartments, the building could be converted into a regular apartment complex catering to the growing number of 20- to 34-year-olds in Waynesville.

During the next decade, the town’s 20 to 34 age group is expected to increase by 15 percent, or 1,262 people, according to the N.C. Office of State Budget and Management. A large, 54-unit apartment complex would give them somewhere to live.

“This would be a very niche project,” Jones said.

However, it would likely require the county to make use of the basement, such as leasing it to a business, and some money put forth by taxpayers.

“Some level of public involvement will be needed,” Jones said.

If converted into regular apartments instead of low-income ones, the tax credits would not be nearly as substantial — about $2 million as opposed to $6 million. That means a bigger upfront expense for developers, making it potentially cost prohibitive unless there was public funding from another source.

Commissioner Mike Sorrells indicated support for the apartment idea, saying that it might be the better option.

“The affordable housing is probably going to be the harder one to take to fruition,” Sorrells said.

Despite having to put forward its own capital, Commission Chair Mark Swanger said the county couldn’t let that get in the way. Otherwise years down the road, the old hospital will become a painful eyesore.

“That is not something I want to see,” Swanger said.

Still, Swanger wanted to digest all the information for a few days before coming to a final decision on how to go forward.

As the commissioners know, it could prove difficult to find anyone willing to purchase the old hospital, but pending a decision from the county, the School of Government is ready to put out some feelers.

“It is hard to know unless you put it out to the market,” said William Lambe, director of UNC’s Community and Economic Development Program. “We could test those waters.”